FREQUENTLY ASKED QUESTIONS 

Q: WHAT IS PROPERTY TAX?

A: Property tax is a tax based on the value of the property owned.  For this reason it is often called an ad valorem tax.

 

Q: HOW DID PROPERTY TAXES ORIGINATE?

A: When Illinois became a state in 1818, the Constitution contained a provision for taxing property in direct proportion to the value of property.  From 1818 to 1930, amendments to the Constitution provided the State with various powers and authorities concerning property tax.  The Revenue Act of 1872 gave Illinois final authority for setting valuations.  The last year the State levied real estate taxes was 1932.

Since then, property taxes have been levied at the local level.  Property tax is a local tax assessed by the County (or township).  Revenues from property tax are collected and spent at the local level. 

Q: WHAT IS CONSIDERED PROPERTY?

A: Property can be divided into two classes – real and personal.  Real property is land and anything permanently attached to the land.  Examples are buildings and fixtures permanently or constructively attached to a building.  Personal property is all property which is not real property.  Personal property includes automobiles, livestock, money and furniture.

 

Q: WHO MUST PAY PROPERTY TAXES?

A: All owners of real property must pay property tax unless specifically exempted by State law.  Leaseholders must pay property tax if they are leasing real estate from an owner whose property is exempt.  Owners of business, industrial, agricultural and residential all pay property tax directly.  In Illinois, taxpayers now pay property taxes only on their real property.

 

Q: WHO SPENDS THE PROPERTY TAXES ONCE THEY ARE COLLECTED?

A: Over 6,000 units of local government in Illinois use property taxes including county governments, townships, municipalities, school districts, and special purpose districts.  Property taxes are raised, spent and distributed locally.  They finance a major part of the services provided by local governmental units which benefit citizens and their property.

 

Q: HOW IMPORTANT ARE PROPERTY TAXES?

A: Property tax is the major source of tax revenue for local governments in Illinois, as it produces more than three-fourths of their total tax revenue.  Municipalities, townships, counties, schools and park districts all use property taxes to finance the majority of services that they provide to their citizens.  The largest share of local property taxes goes to school districts for education.  Other services include police and fire protection, road maintenance, sanitation and recreation. 

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